Posts Tagged ‘$208 billion’

This is Bernie Madoff Accounting. And the same fate that befell Madoff’s investors will one day befall the American people. The Democrats only count the costs they want to count, and simply pretend the rest don’t exist, or assure us that they somehow shouldn’t be counted. Positive numbers from unrealistic expectations show up on one side of the ledger, while negative numbers representing massive government and personal spending are ignored.

This article will demonstrate the REAL cost of ObamaCare. And what we will find is that the monster it creates will sneeze chunks bigger than the $940 billion that the CBO score pitches.

It’s not like the CBO isn’t aware that it is being played like a fiddle. They can only analyze legislation as it is presented – and this legislation is being presented by partisan Democrat ideologues. The CBO has pointed out that the Democrats have a pattern of double-counting the same dollars. But they can’t do anything about it: if the Democrats tell them to double-count, they dutifully double-count. Paul Ryan points out that Medicare cuts are double counted, Social Security taxes get double counted, increased CLASS Act premiums get double counted, to the tune of hundreds of billions of dollars. Other sources of revenue – such as the not-to-be-implemented “Cadillac Tax” which would itself count for 25% of deficit reduction in the CBO score – will likely NEVER see the light of day. The CBO numbers become a shell game.

Then there’s the likelihood that ObamaCare will destroy as many as 700,000 jobs. What’s THAT going to cost America? Would THAT be “deficit neutral”? And how much will it cost Americans as increased government taxes on private health insurance companies, pharmaceutical companies, and medical device and supply companies, pass the burden of those taxes onto us? Will THAT be “deficit neutral” for American families?

But let’s stay out of the budgetary weeds, and remain on what is clear and straightforward.

Let us first begin with the “Doctor fix,” which is a $208 billion spending measure to restore the reimbursement rates for doctors who treat Medicare patients. If it isn’t passed, the current rate – which already leaves hospitals and many doctors losing money to treat Medicare patients – would be slashed by an additional 21 percent. It simply has to be fixed, or doctors and hospitals will quit treating Medicare patients.

But if the Democrats strip that part out of their health care bill, they can claim that 21 percent reduction in doctors’ reimbursements as “savings.” Even if they intend to fix the reimbursement rate, such that those “saving” never materialize. And that little bit of fiscal circular reasoning allows them to claim that their bill is “deficit neutral.”

WASHINGTON (AP) — Congressional budget scorekeepers say a Medicare fix that Democrats included in earlier versions of their health care bill would push it into the red.

The Congressional Budget Office said Friday that rolling back a programmed cut in Medicare fees to doctors would cost $208 billion over 10 years. If added back to the health care overhaul bill, it would wipe out all the deficit reduction, leaving the legislation $59 billion in the red.

The so-called doc fix was part of the original House bill. Because of its high cost, Democrats decided to pursue it separately. Republicans say the cost should not be ignored. Congress has usually waived the cuts to doctors year by year.

What this basically means is that $940 billion number in the CBO report that the Democrats are cheering over is entirely subjective. It would have been a lot higher if they had included the stuff they should have included. And they didn’t include these things simply because it would have made their number look bad. It’s Alice in Wonderland accounting.

So let’s look at the truth: Democrats are claiming that their “$940 billion bill” would reduce the ten-year deficit by $138 billion. But in reality, the doctor fix which SHOULD be in the bill would INCREASE THE DEFICIT by $59 billion. That’s a swing of 197 billion dollars, which is one hell of a swing indeed.

For a variety of reasons, this tally doesn’t remotely reflect the bill’s real ten-year costs. First, it includes 2010 as the initial year. As most people are well aware, 2010 has now been underway for some time. Therefore, the CBO would normally count 2011 as the first year of its analysis, just as it counted 2010 as the first year when analyzing the initial House health bill in the middle of 2009. But under strict instructions from Democratic leaders, and over strong objections from Republicans, the CBO dutifully scored 2010 as the first year of the latest version of Obamacare. If the clock were started in 2011, the first full year that the bill could possibly be in effect, the CBO says that the bill’s ten-year costs would be $1.2 trillion.

This $260 billion ($1.2 trillion minus $940 billion) deficit created by backdating the bill to 2010 instead of starting in 2011 when they should (until Democrats instructed them to do differently) has nothing to do with the deficit created by the doctor fix. So they compound: $260 billion plus $197 billion equals $457 billion.

So we’re talking about a real and obvious deficit of nearlyhalf a trillion dollars. But that’s nowhere near as bad as it will really be.

You see, even starting the CBO ten-year cycle in 2011 is nothing more than a gimmick. That’s because the plan begins taxing in 2011, but benefits (actual spending outlays) don’t begin to be funded until 2014. The Democrats tax for ten years, but only spend for six. Why did they do that? Because that is the only way they can get the illusion of a “deficit neutral” figure. As Heritage points out:

[S]ome scrupulous tactics were used to calculate the 10-year cost projections. The key provisions in the health care bill don’t go into effect until 2014. Meanwhile Medicare cuts and tax increases would go into effect immediately. So the money raised through taxes and spending cuts in the first four years of the 10-year projection would offset the expenditures in the subsequent six years. Consequently, when the true ten year window (2014-2023) is examined, and the costs of the “Doc Fix” are taken into account, the cost rises to $2.3 trillion.

This – and the shenanigans Democrats employ with the CLASS Act – is why Heritage rightly calculates the REAL cost of ObamaCare as likely far higher than $2.5 TRILLION.

These are obvious and transparent gimmicks. But the mainstream media is largely simply ignoring it. They are liberal in their ideology and “gatekeepers” in their philosophy of journalism. The result is that they don’t tell you anything that they don’t want you to know.

But even that – as utterly terrible as it is – is STILL not anywhere close to the REAL cost of this disastrous health care bill. Consider the most sobering Democrat omission of all. From Cato:

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance. When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax. When the government then hands that $10,000 to private insurers, the CBO counts that as government spending. But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending. That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan. And it hides maybe 60 percent of the legislation’s total costs. When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

Here’s where things get really ugly. TPMDC’s Brian Beutler calls “the” $2.5-trillion cost estimate a “doozy” of a “hysterical Republican whopper.” Not only is he incorrect, he doesn’t seem to realize that Gregg and I are correcting for different budget gimmicks; it’s just a coincidence that we happened to reach the same number.

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion. That’s not a precise estimate. It’s just far closer to the truth than President Obama and congressional Democrats want the debate to be.

For the record, it was this subsidizing of the private health insurance companies that Dennis Kucinich was talking about before he backstabbed his own principles and voted for the bill anyway.

In 1994, the universal health care plan proposed by President Clinton included a mandate requiring all individuals to purchase health insurance. The Congressional Budget Office studied the issue and concluded that the United States had never in all its history mandated that individuals purchase any good or service. The CBO stated:

“A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.”

But it is going to start doing so now, under Obama and the Democrats in Congress. They could care less about the Constitution, or about the consequences of radically expanding already massive government bureaucracies.

Obama is going to force you to purchase insurance, but the CBO won’t count the cost of one penny of that spending, now or ever. If you send money to the government that the government requires you to send them, that’s a tax. If the government spends money, that counts as spending. But if the government forces you to send money to a private health insurance company, that isn’t counted. It amounts to a tax that isn’t “deemed” (there’s a good word these days) a tax.

Thus the REAL ten-year cost of ObamaCare won’t be $940 billion. It won’t even be $2.5 trillion. It will be SIX TRILLION DOLLARS. And counting, and counting, and counting, and counting.